HF 122

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; various retirement plans; 
  1.3             authorizing the purchase of service credit for 
  1.4             parental or family leaves of absence or breaks in 
  1.5             service; amending Minnesota Statutes 2000, sections 
  1.6             352.01, subdivision 11; 352B.01, subdivision 3; 
  1.7             353.01, subdivision 16; 422A.155; and 423B.01, by 
  1.8             adding a subdivision; proposing coding for new law in 
  1.9             Minnesota Statutes, chapter 356. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 2000, section 352.01, 
  1.12  subdivision 11, is amended to read: 
  1.13     Subd. 11.  [ALLOWABLE SERVICE.] "Allowable service" means:  
  1.14     (1) Service by an employee for which on or before July 1, 
  1.15  1957, the employee was entitled to allowable service credit on 
  1.16  the records of the system by reason of employee contributions in 
  1.17  the form of salary deductions, payments in lieu of salary 
  1.18  deductions, or in any other manner authorized by Minnesota 
  1.19  Statutes 1953, chapter 352, as amended by Laws 1955, chapter 239.
  1.20     (2) Service by an employee for which on or before July 1, 
  1.21  1961, the employee chose to obtain credit for service by making 
  1.22  payments to the fund under Minnesota Statutes 1961, section 
  1.23  352.24. 
  1.24     (3) Except as provided in clauses (8) and (9), service by 
  1.25  an employee after July 1, 1957, for any calendar month in which 
  1.26  the employee is paid salary from which deductions are made, 
  1.27  deposited, and credited in the fund, including deductions made, 
  2.1   deposited, and credited as provided in section 352.041. 
  2.2      (4) Except as provided in clauses (8) and (9), service by 
  2.3   an employee after July 1, 1957, for any calendar month for which 
  2.4   payments in lieu of salary deductions are made, deposited, and 
  2.5   credited in the fund, as provided in section 352.27 and 
  2.6   Minnesota Statutes 1957, section 352.021, subdivision 4. 
  2.7      For purposes of clauses (3) and (4), except as provided in 
  2.8   clauses (8) and (9), any salary paid for a fractional part of 
  2.9   any calendar month, including the month of separation from state 
  2.10  service, is deemed the compensation for the entire calendar 
  2.11  month. 
  2.12     (5) The period of absence from their duties by employees 
  2.13  who are temporarily disabled because of injuries incurred in the 
  2.14  performance of duties and for which disability the state is 
  2.15  liable under the workers' compensation law until the date 
  2.16  authorized by the director for the commencement of payments of a 
  2.17  total and permanent disability benefit from the retirement fund. 
  2.18     (6) Service covered by a refund repaid as provided in 
  2.19  section 352.23 or 352D.05, subdivision 4, except service 
  2.20  rendered as an employee of the adjutant general for which the 
  2.21  person has credit with the federal civil service retirement 
  2.22  system. 
  2.23     (7) Service before July 1, 1978, by an employee of the 
  2.24  transit operating division of the metropolitan transit 
  2.25  commission or by an employee on an authorized leave of absence 
  2.26  from the transit operating division of the metropolitan transit 
  2.27  commission who is employed by the labor organization which is 
  2.28  the exclusive bargaining agent representing employees of the 
  2.29  transit operating division, which was credited by the 
  2.30  metropolitan transit commission-transit operating division 
  2.31  employees retirement fund or any of its predecessor plans or 
  2.32  funds as past, intermediate, future, continuous, or allowable 
  2.33  service as defined in the metropolitan transit 
  2.34  commission-transit operating division employees retirement fund 
  2.35  plan document in effect on December 31, 1977. 
  2.36     (8) Service after July 1, 1983, by an employee who is 
  3.1   employed on a part-time basis for less than 50 percent of full 
  3.2   time, for which the employee is paid salary from which 
  3.3   deductions are made, deposited, and credited in the fund, 
  3.4   including deductions made, deposited, and credited as provided 
  3.5   in section 352.041 or for which payments in lieu of salary 
  3.6   deductions are made, deposited, and credited in the fund as 
  3.7   provided in section 352.27 shall be credited on a fractional 
  3.8   basis either by pay period, monthly, or annually based on the 
  3.9   relationship that the percentage of salary earned bears to a 
  3.10  full-time salary, with any salary paid for the fractional 
  3.11  service credited on the basis of the rate of salary applicable 
  3.12  for a full-time pay period, month, or a full-time year.  For 
  3.13  periods of part-time service that is duplicated service credit, 
  3.14  section 356.30, subdivision 1, clauses (i) and (j), govern. 
  3.15     Allowable service determined and credited on a fractional 
  3.16  basis shall be used in calculating the amount of benefits 
  3.17  payable, but service as determined on a fractional basis must 
  3.18  not be used in determining the length of service required for 
  3.19  eligibility for benefits.  
  3.20     (9) Any period of authorized leave of absence without pay 
  3.21  that does not exceed one year and for which the employee 
  3.22  obtained credit by payment to the fund in lieu of salary 
  3.23  deductions.  To obtain credit, the employee shall pay an amount 
  3.24  equal to the employee and employer contribution rate in section 
  3.25  352.04, subdivisions 2 and 3, multiplied by the employee's 
  3.26  hourly rate of salary on the date of return from leave of 
  3.27  absence and by the days and months of the leave of absence 
  3.28  without pay for which the employee wants allowable service 
  3.29  credit.  The employing department, at its option, may pay the 
  3.30  employer amount on behalf of its employees.  Payments made under 
  3.31  this clause must include interest at an annual rate of 8.5 
  3.32  percent compounded annually from the date of termination of the 
  3.33  leave of absence to the date payment is made unless payment is 
  3.34  completed within one year of the return from leave of absence. 
  3.35     (10) A period purchased under section 356.555. 
  3.36     
  4.1      Sec. 2.  Minnesota Statutes 2000, section 352B.01, 
  4.2   subdivision 3, is amended to read: 
  4.3      Subd. 3.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
  4.4   means:  
  4.5      (1) for members defined in subdivision 2, clause (a), 
  4.6   monthly service is granted for any month for which payments have 
  4.7   been made to the state patrol retirement fund, and 
  4.8      (2) for members defined in subdivision 2, clauses (b) and 
  4.9   (c), service for which payments have been made to the state 
  4.10  patrol retirement fund, service for which payments were made to 
  4.11  the state police officers retirement fund after June 30, 1961, 
  4.12  and all prior service which was credited to a member for service 
  4.13  on or before June 30, 1961.  
  4.14     (b) Allowable service also includes any period of absence 
  4.15  from duty by a member who, by reason of injury incurred in the 
  4.16  performance of duty, is temporarily disabled and for which 
  4.17  disability the state is liable under the workers' compensation 
  4.18  law, until the date authorized by the executive director for 
  4.19  commencement of payment of a disability benefit or return to 
  4.20  employment.  
  4.21     (c) Allowable service also includes a period purchased 
  4.22  under section 356.555. 
  4.23     Sec. 3.  Minnesota Statutes 2000, section 353.01, 
  4.24  subdivision 16, is amended to read: 
  4.25     Subd. 16.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
  4.26  means service during years of actual membership in the course of 
  4.27  which employee contributions were made, periods covered by 
  4.28  payments in lieu of salary deductions under section 353.35, and 
  4.29  service in years during which the public employee was not a 
  4.30  member but for which the member later elected, while a member, 
  4.31  to obtain credit by making payments to the fund as permitted by 
  4.32  any law then in effect. 
  4.33     (b) "Allowable service" also means a period of authorized 
  4.34  leave of absence with pay from which deductions for employee 
  4.35  contributions are made, deposited, and credited to the fund.  
  4.36     (c) "Allowable service" also means a period of authorized 
  5.1   leave of absence without pay that does not exceed one year, and 
  5.2   during or for which a member obtained credit by payments to the 
  5.3   fund made in place of salary deductions, provided that the 
  5.4   payments are made in an amount or amounts based on the member's 
  5.5   average salary on which deductions were paid for the last six 
  5.6   months of public service, or for that portion of the last six 
  5.7   months while the member was in public service, to apply to the 
  5.8   period in either case immediately preceding commencement of the 
  5.9   leave of absence.  If the employee elects to pay employee 
  5.10  contributions for the period of any leave of absence without 
  5.11  pay, or for any portion of the leave, the employee shall also, 
  5.12  as a condition to the exercise of the election, pay to the fund 
  5.13  an amount equivalent to both the required employer and 
  5.14  additional employer contributions for the employee.  The payment 
  5.15  must be made within one year from the expiration of the leave of 
  5.16  absence or within 20 days after termination of public service 
  5.17  under subdivision 11a.  The employer by appropriate action of 
  5.18  its governing body, made a part of its official records, before 
  5.19  the date of the first payment of the employee contribution, may 
  5.20  certify to the association in writing its commitment to pay the 
  5.21  employer and additional employer contributions from the proceeds 
  5.22  of a tax levy made under section 353.28.  Payments under this 
  5.23  paragraph must include interest at an annual rate of 8.5 percent 
  5.24  compounded annually from the date of the termination of the 
  5.25  leave of absence to the date payment is made.  An employee shall 
  5.26  return to public service and receive a minimum of three months 
  5.27  of allowable service to be eligible to pay employee and employer 
  5.28  contributions for a subsequent authorized leave of absence 
  5.29  without pay. 
  5.30     (d) "Allowable service" also means a periodic, repetitive 
  5.31  leave that is offered to all employees of a governmental 
  5.32  subdivision.  The leave program may not exceed 208 hours per 
  5.33  annual normal work cycle as certified to the association by the 
  5.34  employer.  A participating member obtains service credit by 
  5.35  making employee contributions in an amount or amounts based on 
  5.36  the member's average salary that would have been paid if the 
  6.1   leave had not been taken.  The employer shall pay the employer 
  6.2   and additional employer contributions on behalf of the 
  6.3   participating member.  The employee and the employer are 
  6.4   responsible to pay interest on their respective shares at the 
  6.5   rate of 8.5 percent a year, compounded annually, from the end of 
  6.6   the normal cycle until full payment is made.  An employer shall 
  6.7   also make the employer and additional employer contributions, 
  6.8   plus 8.5 percent interest, compounded annually, on behalf of an 
  6.9   employee who makes employee contributions but terminates public 
  6.10  service.  The employee contributions must be made within one 
  6.11  year after the end of the annual normal working cycle or within 
  6.12  20 days after termination of public service, whichever is 
  6.13  sooner.  The association shall prescribe the manner and forms to 
  6.14  be used by a governmental subdivision in administering a 
  6.15  periodic, repetitive leave. 
  6.16     (e) "Allowable service" also means a period during which a 
  6.17  member is on an authorized sick leave of absence, without pay, 
  6.18  limited to one year.  An employee who has received one year of 
  6.19  allowable service shall return to public service and receive a 
  6.20  minimum of three months of allowable service to receive 
  6.21  allowable service for a subsequent authorized sick leave of 
  6.22  absence. 
  6.23     (f) "Allowable service" also means an authorized temporary 
  6.24  layoff under subdivision 12, limited to three months allowable 
  6.25  service per authorized temporary layoff in one calendar year.  
  6.26  An employee who has received the maximum service allowed for an 
  6.27  authorized temporary layoff shall return to public service and 
  6.28  receive a minimum of three months of allowable service to 
  6.29  receive allowable service for a subsequent authorized temporary 
  6.30  layoff. 
  6.31     (g) Notwithstanding any law to the contrary, "allowable 
  6.32  service" also means a parental leave.  The association shall 
  6.33  grant a maximum of two months service credit for a parental 
  6.34  leave, within six months after the birth or adoption, upon 
  6.35  documentation from the member's governmental subdivision or 
  6.36  presentation of a birth certificate or other evidence of birth 
  7.1   or adoption to the association. 
  7.2      (h) "Allowable service" also means a period during which a 
  7.3   member is on an authorized leave of absence to enter military 
  7.4   service, provided that the member returns to public service upon 
  7.5   discharge from military service under section 192.262 and pays 
  7.6   into the fund employee contributions based upon the employee's 
  7.7   salary at the date of return from military service.  Payment 
  7.8   must be made within five years of the date of discharge from the 
  7.9   military service.  The amount of these contributions must be in 
  7.10  accord with the contribution rates and salary limitations, if 
  7.11  any, in effect during the leave, plus interest at an annual rate 
  7.12  of 8.5 percent compounded annually from the date of return to 
  7.13  public service to the date payment is made.  The matching 
  7.14  employer contribution and additional employer contribution under 
  7.15  section 353.27, subdivisions 3 and 3a, must be paid by the 
  7.16  governmental subdivision employing the member upon return to 
  7.17  public service if the member makes the employee contributions.  
  7.18  The governmental subdivision involved may appropriate money for 
  7.19  those payments.  A member may not receive credit for a voluntary 
  7.20  extension of military service at the instance of the member 
  7.21  beyond the initial period of enlistment, induction, or call to 
  7.22  active duty. 
  7.23     (i) For calculating benefits under sections 353.30, 353.31, 
  7.24  353.32, and 353.33 for state officers and employees displaced by 
  7.25  the Community Corrections Act, chapter 401, and transferred into 
  7.26  county service under section 401.04, "allowable service" means 
  7.27  combined years of allowable service as defined in paragraphs (a) 
  7.28  to (i) and section 352.01, subdivision 11.  
  7.29     (j) For a public employee who has prior service covered by 
  7.30  a local police or firefighters relief association that has 
  7.31  consolidated with the public employees retirement association or 
  7.32  to which section 353.665 applies, and who has elected the type 
  7.33  of benefit coverage provided by the public employees police and 
  7.34  fire fund either under section 353A.08 following the 
  7.35  consolidation or under section 353.665, subdivision 4, 
  7.36  "applicable service" is a period of service credited by the 
  8.1   local police or firefighters relief association as of the 
  8.2   effective date of the consolidation based on law and on bylaw 
  8.3   provisions governing the relief association on the date of the 
  8.4   initiation of the consolidation procedure. 
  8.5      (k) "Allowable service" also means a period purchased under 
  8.6   section 356.555. 
  8.7      Sec. 4.  [356.555] [PARENTAL OR FAMILY LEAVE SERVICE CREDIT 
  8.8   PURCHASE.] 
  8.9      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZATION.] (a)
  8.10  Notwithstanding any provision to the contrary of the laws 
  8.11  governing a plan enumerated in subdivision 4, a member of the 
  8.12  pension plan who has at least three years of allowable service 
  8.13  covered by the applicable pension plan and who was granted by 
  8.14  the employer a parental leave of absence as defined in paragraph 
  8.15  (b), or who was granted by the employer a family leave of 
  8.16  absence as defined in paragraph (c), or who had a parental- or 
  8.17  family-related break in employment, as defined in paragraph (d), 
  8.18  for which the person did not previously receive service credit 
  8.19  or for which the person did not receive or purchase service 
  8.20  credit from another defined benefit public employee pension 
  8.21  plan, is entitled to purchase the actual period of the leave or 
  8.22  of the break in service, up to five years, of allowable service 
  8.23  credit in the applicable retirement plan.  The purchase payment 
  8.24  amount is governed by section 356.55. 
  8.25     (b) For purposes of this section, a parental leave of 
  8.26  absence is a temporary period of interruption or of separation 
  8.27  from active employment for the purposes of handling maternity or 
  8.28  paternity duties that has been approved by the employing unit 
  8.29  and that includes the right of reinstatement to employment. 
  8.30     (c) For purposes of this section, a family leave of absence 
  8.31  is a family leave under United States Code, title 42, section 
  8.32  12631, as amended. 
  8.33     (d) For purposes of this section, a parental- or 
  8.34  family-related break in employment is a period following a 
  8.35  termination of active employment primarily for the purpose of 
  8.36  the birth of a child, the adoption of a child, or the provision 
  9.1   of care to a near relative or in-law, after which the person 
  9.2   returned to the prior employing unit or an employing unit 
  9.3   covered by the same pension plan that provided retirement 
  9.4   coverage immediately prior to the termination of employment. 
  9.5      Subd. 2.  [APPLICATION AND DOCUMENTATION.] A person who 
  9.6   desires to purchase service credit under subdivision 1 must 
  9.7   apply for the service credit purchase with the chief 
  9.8   administrative officer of the enumerated pension plan.  The 
  9.9   application must include all necessary documentation of the 
  9.10  qualifications of the person to make the purchase, signed 
  9.11  written permission to allow the chief administrative officer to 
  9.12  request and receive necessary verification of all applicable 
  9.13  facts and eligibility requirements, and any other relevant 
  9.14  information that the chief administrative officer may require. 
  9.15     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
  9.16  in the applicable enumerated pension plan for the purchase 
  9.17  period must be granted to the purchaser upon receipt of the 
  9.18  purchase payment amount calculated under section 356.55.  
  9.19  Payment of the purchase price must be made before the person 
  9.20  retires. 
  9.21     Subd. 4.  [COVERED PENSION PLANS.] This section applies to 
  9.22  the following pension plans: 
  9.23     (1) general state employees retirement plan governed by 
  9.24  chapter 352; 
  9.25     (2) correctional state employees retirement plan governed 
  9.26  by chapter 352; 
  9.27     (3) general public employees retirement plan governed by 
  9.28  chapter 353; 
  9.29     (4) public employees police and fire plan governed by 
  9.30  chapter 353; 
  9.31     (5) Minneapolis employees retirement plan governed by 
  9.32  chapter 422A; 
  9.33     (6) Minneapolis police relief association governed by 
  9.34  chapter 423B; and 
  9.35     (7) Minneapolis fire department relief association governed 
  9.36  by sections 69.25 to 69.53 and augmented by Laws 1959, chapters 
 10.1   213, 491, and 568, and other special local legislation. 
 10.2      Sec. 5.  Minnesota Statutes 1998, section 422A.155, is 
 10.3   amended to read: 
 10.4      422A.155 [DETERMINATION OF SERVICE CREDIT.] 
 10.5      (a) Notwithstanding the provisions of section 422A.15, 
 10.6   subdivision 1, no employee of the contributing class of the 
 10.7   Minneapolis employees retirement fund shall be entitled to 
 10.8   receive a year of service credit during the employee's final 
 10.9   year of service unless the employee is employed and has received 
 10.10  compensation from the city of Minneapolis or other applicable 
 10.11  employing unit during each of the calendar months making up the 
 10.12  year for which the employee would usually be employed.  Any 
 10.13  employee of the contributing class who is employed and receives 
 10.14  compensation in fewer than the usual number of calendar months 
 10.15  during the final year of service shall receive credit for that 
 10.16  portion of a year that the employee's completed months of 
 10.17  employment and receipt of compensation bears to the usual number 
 10.18  of months which the employee would usually be employed.  
 10.19     (b) Notwithstanding any provision of this chapter to the 
 10.20  contrary, service credit also means a period purchased under 
 10.21  section 356.555. 
 10.22     Sec. 6.  Minnesota Statutes 2000, section 423B.01, is 
 10.23  amended by adding a subdivision to read: 
 10.24     Subd. 3a.  [ALLOWABLE SERVICE CREDIT.] "Allowable service 
 10.25  credit" means: 
 10.26     (1) service rendered as an active member; 
 10.27     (2) service as an elected public official under section 
 10.28  423B.03; 
 10.29     (3) military service credited under section 423B.09, 
 10.30  subdivision 3; and 
 10.31     (4) a period of service purchased under section 356.555. 
 10.32     Sec. 7.  [MINNEAPOLIS FIRE DEPARTMENT RELIEF ASSOCIATION; 
 10.33  PARENTAL LEAVE PURCHASE.] 
 10.34     Notwithstanding any provision of Minnesota Statutes, 
 10.35  sections 69.25 to 69.53; Laws 1959, chapters 213, 491, and 568; 
 10.36  or any other special local law governing the Minneapolis fire 
 11.1   department relief association to the contrary, service credit 
 11.2   for the purposes of calculating service pensions, disability 
 11.3   benefits, or survivor benefits includes a period purchased under 
 11.4   Minnesota Statutes, section 356.555. 
 11.5      Sec. 8.  [REPEALER.] 
 11.6      Sections 1 to 7 are repealed on May 16, 2003. 
 11.7      Sec. 9.  [EFFECTIVE DATE.] 
 11.8      Sections 1 to 7 are effective on July 1, 2001.